Administration of the Department of Veterans Affairs' $55 billion-a-year health care system has evolved into a feudal-like system in which 21 regional directors use discretionary money not for veterans' care but for bonuses, undocumented travel and other expenses, the Tribune-Review found.

Compounding the problems in the VA's Veterans Integrated Service Network, or VISN, regions have widely disparate staffs whose educational qualifications needed to oversee administration of health care services to millions of America's veterans appear to come up short, the Trib found.

For example, VISN4 — the Pittsburgh-based regional center that controls VA medical care for an estimated 1.5 million veterans in all but four Pennsylvania counties and all or parts of five other states — is led by two people whose highest college academic degrees are masters in social work, not medicine or administration.

Many of the health care center executives reporting to Regional Director Michael Moreland in VISN4 also lack educational degrees in health care administration or facilities management, according to VA websites.

The situation prompted Rep. Tim Murphy, R-Upper St. Clair, to ask the House Committee on Veterans Affairs to investigate “hiring and promotion procedures” at the VA's senior administrative levels.

Murphy said he is concerned about not only lack of accountability for millions of dollars but whether administrators have the expertise to handle critical health care matters such as the Legionnaires' disease outbreak at the Pittsburgh VA.

“We want to be sure people have the proper qualifications,” he said.

Moreland and VA spokesman David Cowgill declined requests to be interviewed for this story.

The VA promised to fix poor administrative oversight, but findings in a 2012 VA Office of Inspector General report the Trib reviewed speak to the difficulty of doing so.

Abuses among the regional centers were widespread, according to the report. Bonuses were handed out indiscriminately, travel requests often were approved by non-supervisors for their bosses, and budgetary controls were nearly non-existent.

Staffing at VISN centers ballooned from original estimates of about 200 employees to more than 1,000, and maybe over 4,500. The VA Inspector General's Office cited the discrepancy in a 2012 audit, saying it could not accurately determine the number of staff members because VISN administrators co-mingled funds.

The result, the IG reported, was “increased risk of inefficiencies and the misuse of funds.”

The IG found that the chief financial officer for the national VA “has no direct line authority over the (regional) offices.”

Nor does the chief financial officer appear to want that responsibility. As long as regional offices “performed well, relative to their performance measures,” the CFO told auditors “he was not concerned with how they spent funds.”

‘Significant risk of fraud'

The IG is not alone in citing VA financial shortcomings. The Government Accountability Office reports the VA spends billions of dollars each year with scant fiscal oversight.

In 2007, the VA wrote off $6.9 billion as “miscellaneous obligations.” A sampling of such obligations reviewed by the GAO found none “had documented approval.”

“Without basic controls in place over billions of dollars in miscellaneous obligations, VA is at significant risk of fraud, waste and abuse,” the GAO said.

Even after the VA said it would adopt a system to address the problem, the GAO said that of 476 obligations examined, 379 were in “noncompliance with the new policies and procedures.”

Today, the GAO says it has no idea how much money the VA spends as miscellaneous obligations. The agency hasn't been asked to find out and the VA's annual reports don't appear to shed light on the issue, said Beryl Davis, the GAO's director of financial management and assurance.

“I just don't have any idea,” Davis said. “Maybe it's down to $3 billion to $4 billion.”

Decentralized control

The VISN system was introduced in 1995 to reduce waste by decentralizing control over VA health funds and giving that authority to regional officials who presumably have better hands-on understanding of the needs of local veterans.

But a Trib examination of the VISN4 office shows that several of those in charge of the system and its branches have little or no formal degrees in medicine or administration.

Before becoming director of VISN4, Moreland was director of VA's Pittsburgh Healthcare System.

Moreland was a clinical social worker by training, obtaining his master's degree in that field from the University of Maryland. Moreland is certified by the American College of Health Care Executives, which requires he holds a master's degree in some field, has experience in hospital administration and passed a multiple choice examination.

Moreland is a multiple recipient of the Meritorious Presidential Rank Award — the government's highest career service award for civil servants — and has received five-figure bonuses for work. His achievements include launching the liver and kidney transplant program and heading a national infection-control initiative.

His top associate in the network, Associate Director Carla Acre Sivek, earned her top academic degree in social work. Like Moreland, she received her training at the Pittsburgh VA.

Also from the Pittsburgh VA is James F. Baker, chief financial officer of VISN 4, who has a bachelor's degree in business administration, VA websites state.

The lack of advanced administrative education at the top of a large hospital system does not mean that others along the line do not pick up the slack, but exactly how that is done is what Murphy wants investigators to find out.

A Trib review of all VISN administrators found only Moreland and one other administrator did not have formal degrees in medicine, business or health care administration.

Training in other fields

Moreland's region is dotted by hospital administrators who, like their boss, lack formal academic training in their fields.

For example, the medical center director in Lebanon — who came up through the Pittsburgh VA hospital — has a bachelor of arts degree, according to a VA website. It is not clear from a VA website in what area Director Robert Callahan earned his degree from St. Mary's College in Maryland.

He did not respond to requests for an interview, and a Trib request for information about his degree went unanswered.

Callahan's top assistant, Robin Aube-Warren, is a teacher by training, with an undergraduate degree in French and a master's in education. Callahan was the subject of a blistering IG report last year that accused him of not properly reporting a nurse who stole a patient's pain medications.

The report said Callahan “did not testify freely and honestly” about the incident, and noted that the VA “provides penalties of reprimand to removal” for such actions. Callahan remains director of the medical center, and for 2011 — the year the incident was reported to authorities — he received a $144,439 salary plus a $3,000 bonus approved by VISN4.

In Altoona, Director William Mills has a teaching background, with a master's in education. In Wilkes-Barre, Director Margaret O'Shea has a master's in library science. Director Joseph Dalpiaz in Philadelphia, like Moreland, has training in social work.

But it is Pittsburgh that drew attention this year when the IG showed up to examine the handling of Legionnaires' disease.

The chief operating officer in charge of facilities managements is Lovetta Ford, a social worker with a history of working with Moreland. A VA website said Ford “is responsible for oversight of all operations at a major medical facility; this includes regulation of a $550 million budget and management of 3,100 federal employees.”

Before this position, Ford was Moreland's homeless veterans coordinator with VISN4.

Among other matters, Murphy wants to check the qualifications for Ford's position.

“There have been too many problems at the Pittsburgh VA, which are clearly not acceptable,” he said.

Lou Kilzer is a Trib Total Media staff writer. Reach him at 412-380-5628 or lkilzer@tribweb.com.

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